2 Glorious Growth Stocks to Buy Hand Over Fist If the Stock Market Crashes

As the S&P 500 index reaches new heights, warnings are emerging that this bullish trend might soon encounter turbulence. Factors such as rising inflation, interest rate adjustments, and fluctuations in artificial intelligence stocks could trigger a significant correction. The S&P 500's current elevated valuation, with a Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41.8, places it second only to the dot-com bubble peak in 2000.

While a 49% decline occurred during the dot-com bubble burst, this decline is unlikely, but a sell-off seems increasingly probable. Historically, the broader market consistently experiences long-term upward trends, making downturns a prime opportunity for investors. Two stocks to consider if the market drops are Cohu and Upstart Holdings.

Cohu specializes in testing and handling equipment for semiconductor fabrication, a critical component in AI development. Their Eclipse machine autonomously handles finished semiconductors, testing them under real operating conditions. Additionally, their Neon inspection platform uses AI software to detect microscopic imperfections in memory chips, ensuring they are defect-free.

With revenue expected to grow by 35% to $612 million in 2026, Cohu is poised for significant expansion, particularly in fulfilling orders from AI customers worth $850 million as of June 30. Despite its premium P/E ratio of 34.5, the stock could be a solid long-term buy if it experiences a 20% to 30% decline in value.

Upstart Holdings employs AI to assess borrowers' creditworthiness, enhancing accuracy compared to traditional methods. Its advanced algorithm analyzes over 2,500 data points per applicant, making decisions in real time. Upstart's underwriting model is 2.74 times more accurate than traditional credit scoring. In the second quarter, the company originated $4.2 billion in loans, with a 42% year-over-year increase in revenue, totaling $364.7 million.

Upstart's market potential spans $25 trillion in global originations and $1 trillion in annual fee income, marking it as an attractive buy given its current P/S ratio of 2, historically low.